Types of Sales and What They Mean
Sales are activities related to the number of products or goods sold in a given period of time. The sale of a product to a buyer is also sometimes regarded as a sale as well. But it is important to note that sales are different from sales and the processes associated with them. Sales in business may be subdivided into several other sub categories.
One of the common types of sales is inside sales. In an inside sales, there is a sales person who goes to an appointment with a prospect and closes a deal with the prospect. In this type of sales, there is no clear distinction between the two parties, but instead the two parties interact only to close the sale and move on. A number of companies use inside sales in order to close deals quickly and with minimal effort. For instance, a bank uses inside sales in order to close a loan check before the check is cashed by a customer.
Another common type of sales transaction is the term sales. In term sales, there is a sale made on the basis of a contract. This kind of sale involves an exchange of services for a specific price and there is no exchange of products. Some examples of term sales are sales made on consignment, sale in step up, and sale on warranty or guarantee periods.
Another type of sales transaction is the financial sales transaction. In a financial sales transaction, the buyer and seller enter into a contract that stipulates an agreed upon price for the total of the money being traded. The terms of the contract could be long term or short term. Long term sales normally entail an investment that yields returns over a long period of time. Short term sales refer to transactions in which the buyer pays a price for an asset and holds that asset until the time for the return amount is reached.
Another common sales transaction is the gross sales transaction. In a gross sales transaction, the buyer and seller enter into a contract that specifies an agreed upon price for the total of the money being sold. The buyer pays the seller for the amount indicated on the contract and the seller must then deliver the merchandise or pay the agreed upon price. The buyer’s gross sales refers to the total amount paid by the buyer for the products or services sold, and the seller’s gross sales refers to the amount he or she pays the supplier or agent for the goods delivered.
Net sales refer to those amounts that would have been made if the selling prices had not been altered from the price set down at the beginning of the transaction. Net sales include the gross sales less any expenses incurred to reach the gross sales. Net sales can also include amounts that would have been made if the price of the product had not been altered from the original price.